Annual Report Delta Lloyd Asset Management N.V. Amsterdam

Transcription

1 Annual Report 2016 Delta Lloyd Asset Management N.V. Amsterdam Address: Delta Lloyd Asset Management N.V. Amstelplein BC Amsterdam The Netherlands Post address: PO box BA Amsterdam The Netherlands Website:

2 Table of Contents Report of Executive Board... 1 Financial Statements... 1 Balance sheet as at 31 December Income statement for the year Cash flow statement for Notes to the balance sheet and income statement...10 Other information Provisions in the Articles of Association with regard to the appropriation of profit...22 Auditor s report...22 Delta Lloyd Asset Management N.V., Amsterdam

3 Report of Executive Board In 2016, Delta Lloyd Asset Management N.V. (DLAM) realized a profit before taxes of EUR 1,1 million compared to EUR 42.0 million in This lower profit is mainly attributable to the management fees and performance fees received and impairment of goodwill. Multiple year overview EUR (x 1,000) Income statement Net revenue 84, , , ,236 Operating profit / (loss) 1,235 42,056 20,800 30,923 Profit / (loss) after taxation ,177 15,475 23,068 Balance sheet Total assets ,731 65,403 59,100 Shareholders equity 27,081 58,567 42,865 50,458 The financial statements over 2015 were adopted at the General Meeting of Shareholders held on 18 May 2016, where the shareholders resolved to distribute a dividend of EUR 31.8 million. Risk management Risk management, compliance and internal control are the underpinning of an effective control environment, and are hence of great importance to (DLAM). DLAM is continually striving to improve its risk management practices, and applies a series of guidelines and best practices for the financial sector to manage the risks to which it is exposed. In 2016, DLAM commenced with the so-called Blue Attitude program in order to further professionalise its internal control environment according to these best practices. This program is executed in a two-year period (2016 and 2017), and addresses the following subjects: Further improvements in the second line of defence in order to create a more visible and more robust risk and compliance function; The implementation of improvements to processes and committee structures in which the organisation accepts risk in new (or modified) clients, mandates, products, instruments and the benchmarks used; and The implementation of improvements with respect to a consistent risk culture throughout the organisation. Both Group Audit and the Netherlands Authority for the Financial Markets (AFM) have expressed a satisfactory opinion on the progress and results of this program. Risk management organisation DLAM has implemented the three lines of defence model: The first line is the risk owner, and covers the entire organisation of production and control. It is the responsibility of these departments to identify risks and business improvements actions, to implement controls, and to report on the progress. The second line oversees and supports the risk management process. Within DLAM, the second line consists of the disciplines Financial Risk Management, Operational Risk Management, Compliance and Legal. These departments report to the Chief Risk Officer (CRO) of DLAM, who is also a member of the Executive Board. The CRO has a functional line to the CRO of the DL Group. The second line proactively: o Advises the Executive Board on the identification and management of the risks specific to DLAM; Delta Lloyd Asset Management N.V., Amsterdam 1

4 o Monitors that DLAM properly executes the relevant risk policies, and provides guidance where necessary; o Ensures that all internal and external regulation is complied with; o Aims to increase the level of risk and compliance awareness; and o Reports to the DLAM Risk Committee and the Executive Board on these matters. The third line uses a systematic and disciplined approach to provide independent and objective assurance on the effectiveness of risk management, control and governance processes. Group Audit of DL formally reports its findings to the Executive Board, the Advisory Board of DLAM, the Board of Directors of DL Group, and the Supervisory Board of DL Group. DLAM is supervised by the AFM and the Dutch Central Bank (DNB). Risk identification The process for managing risks involves a series of periodic steps. These steps planning and change, risk analysis, action and monitoring, and management reporting are performed annually. The most significant risks are hence identified by the Executive Board in a strategic risk assessment. This is supplemented by risk assessments performed at the department- and process-level. These assessments are supported by the second line, which compiles quarterly reports on the basis hereof. DLAM annually prepares an ICAAP report in accordance with the Internal Capital Adequacy Assessment Process. For the risks thus identified in 2016, the Executive Board has assessed the net probability and impact, taking into account the mitigating measures already in place, and has compared the overall outcome against the capital available for absorbing these residual risks. The Executive Board have concluded on this basis that DLAM N.V. is sufficiently solvent. The three most significant risks identified are: 1. IT risk A dated IT landscape increases the probability of operational losses, because timely execution of key processes comes in jeopardy. The key processes exist of portfolio management, order management, position keeping, performance measurement and other client services. To mitigate this risk, the following mitigating actions have been executed: Investments in the IT Landscape; Identifying change capacity and hiring project management staff; and Setting up the correct project governance. 2. Business Process Management (BPM) risk BPM risk is the risk of financial loss or reputational damage resulting from inadequate or failed internal processes, people and systems or from external events. These operational errors can potentially lead to claims, operational losses and reputational damage. To mitigate this risk, the following mitigating actions have been executed: Executing projects in the Shape 4 Growth (S4G) program; Updating Issue Management procedure; Implementing tooling for issue management; Facilitating first line of defence by second line of defence; Regular consultation between Group Audit (third line of defence) and second line of DLAM; and Strengthening the second line of defence. 3. Compliance risk Compliance risk is defined as the risk of intervention by supervisory authorities, caused by not being complaint with laws and regulations, insufficient capacity to implement these new rules and regulations and insufficient capacity at the second line of defence. This can lead to reputational damage and penalties. To mitigate this risk, the following mitigating actions have been executed: Delta Lloyd Asset Management N.V., Amsterdam 2

5 Strengthening the second line of defence; Organising steering committee regulatory, which functions as a gatekeeper regarding new laws and regulations; Hiring project management staff; Implementation of, amongst others EMIR and MiFID 2; and Executing Blue Attitude project. Furthermore DLAM is to a certain extent exposed to different market risks such as interest rate risk, credit risk, liquidity risk and foreign currency risks. Managing these risks is an essential part of the daily operational processes of the investment manager under the responsibility of DLAM. Interest rate risk Interest rate risk is considered to be low given that no or limited interest is calculated on the intangible fixed asset, the receivables, cash and cash equivalents and current liabilities. Credit risk Credit risk is the risk that a counterparty will fail to discharge a contractual or other agreed obligation (including obligations relating to credits, loans, receivables and guarantees received). Given the nature of the business activities, the credit risk on the receivables is limited given that most of the receivables are owed from group companies or related parties. Liquidity risk Liquidity risk is the risk of the Company being unable at any time to meet its payment commitments without incurring disproportionate losses. Given the nature of the business activities, this risk is considered to be very low and no special measures, other than the usual management and control measures, have therefore been taken. As per year end the Company has a positive working capital position. Currency risk As at the balance sheet date the sum of assets and liabilities denominated in foreign currency was nil. Therefore DLAM runs no currency risk. Internal control framework The operational processes are documented and are in line with the requirements of the Financial Supervision Act (wet financieel toezicht) and the Decree on the Supervision of the Conduct of Financial Enterprises (besluit gedragstoezicht financiële ondernemingen). DLAM applies an extensive system of Sox, Solvency II and ISAE 3402 controls to manage its risks. The second line checks whether these controls have been performed and reports on this independently to the management and the board. The number of controls found to be operating inadequately slightly increased compared to However, most of the residual risks have been categorized as low or minimal. DLAM has hence received an unqualified ISAE3402 audit opinion for the year NN Group On 23 December 2016, NN Group and Delta Lloyd announced that they reached a (conditional) agreement on an improved recommended public offer for the entire issued and outstanding ordinary share capital of Delta Lloyd. NN Group and Delta Lloyd agreed to certain non-financial covenants in respect of corporate governance, post-closing legal merger, strategy, organisation, integration and employees. On March, 29th, a large majority of the shareholders of Delta Lloyd N.V. has approved a conditional Legal Merger with NN Group NV. On April, 7th, NN Group has obtained declarations of no objection from the Dutch Central Bank (DNB) and the European Central Bank (ECB) in connection with their offer. In addition, NN Group NV has obtained competition clearance from the European Commission. Delta Lloyd Asset Management N.V., Amsterdam 3

6 On 21 April 2017, NN Group NV obtained 93.3% of the issued and outstanding ordinary shares in the capital of Delta Lloyd NV. Since the transaction is now completed, NN Group NV is the new ultimate parent of DLAM. Remuneration policy Delta Lloyd Asset Management employees remuneration is covered by the Delta Lloyd NV remuneration policy and the Delta Lloyd Asset Management remuneration policy. The Governance Remuneration Commission of Delta Lloyd NV reviews the remuneration policy of Delta Lloyd NV as wel as Delta Lloyd Asset Management NV. Our remuneration policy distinguishes between four categories of staff: Staff Staff with a controlling function (identified staff) Staff with a variable remuneration scheme Directors and Managers The remuneration policy per category looks like this: Staff Most of our employees executive are covered by the collective labour agreement (CAO) of Delta Lloyd NV. These employees have no variable component in the salary. Their work has no important influence on the risk profile Delta Lloyd Asset Management NV and does not consist of control tasks. Staff controlling Most of our employees with a controlling function are covered by the CAO of Delta Lloyd NV. These employees have no variable component in the salary. These employees identify, measure and control all risks that are important for Delta Lloyd Asset Management NV on a daily base. Their work has no important influence on the risk profile of Delta Lloyd Asset Management NV. Staff with a variable remuneration scheme This concerns employees who are responsible for the investment policy within one or more investment portfolios and employees from Trading and Sales. The remuneration of these employees consist of a fixed and a variable part. The variable part is based on objectives which are both quantitative (financial) and qualitative (functional). The variable part is defined per function group and is limited to 50% or 60% of the fixed part. The setting of the variable remuneration is based on measurable results such as performance, attribution and assets under management as well as on the basis of qualitative factors. Thorough risk management ensures that these employees take no undue risks in the pursuit of outperformance. 40% of the total variable remuneration is paid out in cash, the remaining 60% is paid in three years in equal parts of 20%. The board of directors of Delta Lloyd NV can reclaim this variable remuneration in certain cases in whole or in part. Directors and Managers The Directors of the board and some of the departmental managers of Delta Lloyd Asset Management NV are covered by the remuneration policy of Delta Lloyd NV. Under this policy a maximum variable remuneration of 20% is established based on quantitative and qualitative performance criteria. The execution of the remuneration policy is monitored by Group Risk and Group Integrity. The board of directors of Delta Lloyd NV has discretionary powers in exceptional circumstances, to intervene in the implementation of the variable remuneration policy. A description of the actual remuneration policy is available on the website. On request a copy free of charge can be obtained. Delta Lloyd Asset Management N.V., Amsterdam 4

7 Number of staff and total remuneration Number of staff and total remuneration Staff*** 1. staff** 2. staff with a controlling function 3. "Identified staff" variable remuneration policy 4. Directors and Managers "Identified staff" total staff Delta Lloyd Asset Management NV number of staff (per ) Total fixed remuneration for the year ,454,726 1,456,404 8,604,674 1,497,829 19,013,633 Total variable remuneration based on the performances for the year 2016* 22,419-1,242,402 48,508 1,313,329 Total variable remuneration payable by the fund (lucrative interest, carries interest etc.) * in the table the unconditional granted remuneration for the year 2016 has been accounted for. A postponed part of the variable remuneration will be accounted for if that part has become unconditionally. ** As mentioned before staff defined under 1 have no variable component in their remuneration. It is an remuneration based on the basis of a personal achievement *** The Treasury department has been moved from Delta Lloyd Asset Management NV to Delta Lloyd Group. Regarding article 1:120 sub 2 under a we mention the following: no one has received a remuneration exceeding one million. For the aforementioned arrangements, all conditional grants (including retention) will be terminated upon termination of the employment contract. Amsterdam, 24 May 2017 T.J. Maters N.G.H. Ritzerveld R. van Mazijk Delta Lloyd Asset Management N.V., Amsterdam 5

8 Financial Statements Delta Lloyd Asset Management N.V., Amsterdam 6

9 Balance sheet as at 31 December 2016 (before proposed appropriation of result) EUR (x 1,000) Note ASSETS Intangible fixed assets Goodwill ,000 Receivables Amounts receivable from group companies 4.2 2, Amounts receivable from related parties ,779 44,308 Amounts receivable from external parties 4.4 2, Deferred tax assets 4.5 1,500-25,334 46,058 Cash and cash equivalents ,136 42,673 TOTAL ASSETS 61,470 98,731 EQUITY AND LIABILITIES Shareholders equity Issued and paid-up share capital Other reserves ,710 27,333 Result for the year ,177 27,081 58,567 Current liabilities Amounts payable to group companies ,397 38,727 Other liabilities ,437 34,389 40,164 TOTAL EQUITY AND LIABILITIES 61,470 98,731 Delta Lloyd Asset Management N.V., Amsterdam 7

10 Income statement for the year 2016 EUR (x 1,000) Note Income Net revenue , ,647 84, ,647 Total operating expenses Distribution expenses ,486 44,874 Other operating expenses ,274 32,217 Amortisation of intangible fixed assets 4.1 2,500 2,500 Impairment of intangible fixed assets 4.1 7,500-83,760 79,591 Operating profit / (loss) 1,235 42,056 Finance income and expenses Interest income and other related income 9 - Interest expenses and other related expenses (158) (70) (149) (70) Profit / (loss) before taxation 1,086 41,986 Income tax ,809 Profit / (loss) after taxation ,177 Delta Lloyd Asset Management N.V., Amsterdam 8

11 Cash flow statement for 2016 EUR (x 1,000) Cash flow from operating activities Profit / (loss) after taxation ,177 Increase (-) / decrease (+) in receivable 20,724 (19,054) Increase (+) / decrease (-) in current liabilities (5,775) 17,626 Amortisation of intangible fixed assets 2,500 2,500 Impairment of intangible fixed assets ,263 32,249 Cash flow from financing activities Dividend paid (31,800) (15,475) Interim dividend paid - - (31,800) (15,475) Increase / (decrease) Cash and cash equivalents (6,537) 16,774 Cash and cash equivalents at the beginning of the year 42,673 25,899 Cash and cash equivalents at the end of the year 36,136 42,673 Increase / (decrease) Cash and cash equivalents (6.537) 16,774 Delta Lloyd Asset Management N.V., Amsterdam 9

12 Notes to the balance sheet and income statement 1 General 1.1 Activities The original company was established on 28 December On 24 October 2001 the company s name was changed and the articles of association were amended and the current activities were added. The company s activities consist of investing, managing and bookkeeping funds entrusted to it by third parties. For the purposes of its business activities Delta Lloyd Asset Management N.V. is licensed as a manager of alternative investment funds (AIF's) and UCITS within the meaning of Articles 2:65 and 2:69b of the Financial Supervision Act [Wet op het financieel toezicht]. 1.2 Main developments during the year The following main developments have been identified during the year: Liquidated Funds The following fund has been liquidated in /04/2016 Delta Lloyd Cyrte Africa Fund The following funds are in liquidation. 14/10/2016 Delta Lloyd L Asian Participation Fund 30/10/2016 Delta Lloyd Azië Deelnemingen Fonds N.V. Name change Delta Lloyd Institutional Global Equity Index Fund was renamed on November 1, 2016 into Delta Lloyd Equity Sustainable Global Fund Change of management of Delta Lloyd Asset Management N.V. Jelle Ritzerveld has been appointed as CRO of Delta Lloyd Asset Management N.V. as of June 1, Post balance sheet events Introduction of the following funds 09/01/2017 Delta Lloyd Equity Sustainabel Global Fund A 09/01/2017 Delta Lloyd Equity Sustainable Global Fund DPF Liquidation of the following fund 22/02/2017 Delta Lloyd L Money Market Fund 1.3 Group companies Delta Lloyd Asset Management N.V. ("the Company") is a member of the Delta Lloyd group of companies, which is headed by Delta Lloyd N.V., Amsterdam. Delta Lloyd Asset Management N.V. is a wholly owned subsidiary of Delta Lloyd N.V. The latter has filed a statement of joint and several liabilities in accordance with Article 403, Title 9, Book 2, of the Dutch Civil Code and so has declared itself jointly and severally liable for debts arising from legal acts of the Company. The Company uses the services of the Delta Lloyd in performing its activities. The entities covered by the joint venture agreement between Delta Lloyd N.V. and ABN AMRO N.V. constitute group companies. Delta Lloyd Asset Management N.V., Amsterdam 10

13 1.4 Other associates In addition to the companies belonging to Delta Lloyd, the Delta Lloyd (institutional) investment funds are also considered to be related parties given that the Company is responsible (or partly responsible) for managing these funds. The Delta Lloyd (institutional) investment funds are: Delta Lloyd Investment Funds Delta Lloyd Balanced assets Fund Delta Lloyd Deelnemingen Fonds N.V. Delta Lloyd Dollar Fonds N.V. Delta Lloyd Euro Credit Fund N.V. Delta Lloyd Europees Deelnemingen Fonds N.V. Delta Lloyd Global Property Index Fund Delta Lloyd Investment Fund N.V. Delta Lloyd Mix Fonds N.V. Delta Lloyd Rente Fonds N.V. Delta Lloyd Select Dividend Fonds N.V Delta Lloyd L SICAV Investment Funds (Luxembourg) Delta Lloyd L Bond Euro Delta Lloyd L European Fund Delta Lloyd L European Participation Fund Delta Lloyd L Global Property Fund Delta Lloyd L Global Fund Delta Lloyd L Money Market Fund Delta Lloyd L Cyrte Global Fund Delta Lloyd Privilige Alpha cycled Fund Triodos SICAV I Delta Lloyd Institutional Investment Funds Delta Lloyd Equity Sustainable Global Fund Delta Lloyd Institutioneel Blue Return Fund Delta Lloyd Institutioneel Property Fund Delta Lloyd Institutioneel Wereld Fonds Delta Lloyd Institutioneel Mix Defensief Delta Lloyd Institutioneel Mix Neutraal Delta Lloyd Institutioneel Mix Offensief Delta Lloyd Institutioneel Mix fonds Conservatief Delta Lloyd Institutioneel Blue return fonds B Delta Lloyd inzake Index Mix fonds 1 Delta Lloyd inzake Index Mix fonds 2 Delta Lloyd inzake Index Mix fonds 3 Delta Lloyd Fixed Income Umbrella Delta Lloyd Sovereign XLT Bond Fund Delta Lloyd Sovereign LT Bond Fund Delta Lloyd Sovereign Bond Fund Delta Lloyd Corporate Bond Fund Delta Lloyd Collateralized Bond Fund Delta Lloyd Sub-sovereign Bond Fund Delta Lloyd Asset Management N.V., Amsterdam 11

14 Delta Lloyd Sovereign XXLT Bond Fund Delta Lloyd Mezzanine Fund 1.5 Notes to the cash flow statement The cash flow statement is prepared in accordance with the indirect method. A distinction is drawn between cash flows from operating, investing and financing activities. Interest income and expense are shown in the cash flow statement as cash flow from operating activities. Delta Lloyd Asset Management N.V., Amsterdam 12

15 2 Accounting principles for the valuation of assets and liabilities 2.1 General The financial statements have been prepared in accordance with the statutory provisions of Title 9, Book 2, of the Dutch Civil Code and the Financial Supervision Act. The financial statements are presented in Euros, the Company s functional currency. Assets and liabilities are shown at nominal value, unless stated otherwise. The financial statements were prepared on 22 May In 2016 some amounts had been accounted for concerning the year Because the sum of these amounts were material the figures of 2015 had to be adjusted. This had a negative impact on the net result 2015 of EUR The balance sheet, profit and loss account, Cash flow statement and the notes of 2015 have been adjusted accordingly. Within the profit and loss account 2015 the line items Net revenue, Other operating expenses and Income tax are adjusted. 2.2 Comparison with previous year The principles used for valuing assets and liabilities and determining the result are unchanged in relation to the previous reporting year. 2.3 Intangible fixed assets Initial recognition of intangible fixed assets is at cost and is amortized over 10 years. If required, a provision for impairment is taken. 2.4 Receivables Receivables are shown at nominal value less any provisions deemed necessary for bad or doubtful debts. 2.5 Shareholders equity Shareholders equity consists of paid-up share capital, other reserves and the result of the year under review. Other reserves comprise the cumulative results of previous years less any dividends paid. 2.6 Current liabilities Current liabilities are shown at nominal value. 2.7 Off balance sheet items Financial fixed assets, which included the preferred shares held in investment funds, are valued at nominal value. These preferred shares will receive a special profit allowance from these funds when specific conditions are met. Delta Lloyd Asset Management N.V., Amsterdam 13

16 3 Principles for determining the result 3.1 General The result is determined as the difference between the income from and the costs of services supplied and other expense items in the year. Foreseeable obligations and possible losses arising during the financial year are recognized if they are known at the time of the financial statements being prepared, with account being taken of the conditions applying in respect of provisions. 3.2 Net revenue Net revenue comprises the management and performance fees charged to the investment funds listed in section 1.3 in accordance with the applicable prospectuses or conditions of management and custody. This item also includes the fees received in respect of the joint venture agreement between Delta Lloyd N.V. and ABN AMRO N.V. for managing the investment portfolios. The Company also receives a fee for managing institutional investment portfolios under investment mandates. Fees are allocated to the period to which they relate. 3.3 Expenses Distribution expenses are the amounts paid to distributors. Other operating expenses are the amounts charged to the Company for management of the investment portfolios. Expenses are allocated to the period to which they relate. 3.4 Interest income and other similar income This item comprises interest received on bank accounts, call money and deposits and interest on receivables. 3.5 Interest expense and other similar expense This item comprises interest paid on bank accounts, deposits and interest on payables. 3.6 Taxes Delta Lloyd Asset Management N.V. is part of the fiscal unity of Delta Lloyd N.V. Within this fiscal unity taxes are settled as if each company were an independent taxable entity. Taxes are calculated on the result disclosed in the income statement, taking into account of tax-exempt items and partly or completely nondeductible expenses. The amount of income taxes due is shown in the financial statements and paid to Delta Lloyd N.V. Delta Lloyd Asset Management N.V., Amsterdam 14

17 4 Notes to the balance sheet 4.1 Intangible fixed assets EUR (x 1.000) As at 1 January 10,000 12,500 Amortisation (2,500) (2,500) Impairment (7,500) - As at 31 December - 10,000 EUR (x 1.000) Historical cost 25,000 25,000 Accumulative amortisation (25,000) (15,000) As at 31 December - 10,000 Intangible fixed assets comprises the goodwill paid to Dresdner VPV N.V. on the acquisition of customer relationships of Dresdner VPV N.V. in order to obtain the total investment management contract of Delta Lloyd Deelnemingen Fonds N.V. The goodwill is amortized over a period of 10 years. This represent the duration of the expected positive cash flows from the contract. An impairment is deemed necessary given the negative expectations of the profitability of the Fund. 4.2 Amounts receivable from group companies EUR (x 1.000) Delta Lloyd N.V Delta Lloyd Levensverzekering N.V Delta Lloyd Private Equity 2007 B.V Delta Lloyd Private Equity America 2007 B.V Delta Lloyd Banken N.V Delta Lloyd Life N.V ABN-AMRO Verzekeringen N.V As at 31 December 2, Amounts receivable from related parties EUR (x 1.000) Delta Lloyd investment funds 19,779 44,308 As at 31 December 19,779 44,308 A provision for bad or doubtful debts has been made for an amount of EUR 218,918 as at 31 December 2016 (2015: nil). 4.4 Amounts receivable from external parties Delta Lloyd Asset Management N.V., Amsterdam 15

18 This item largely comprises amounts receivable from asset management parties and Triodos SICAV I. No provision for bad or doubtful debts has been made for as at 31 December 2016 (2015: nil). 4.5 Deferred tax assets The deferred tax asset is caused by the fact that the goodwill only has been impaired commercial and not fiscal. 4.6 Cash and cash equivalents EUR (x 1.000) Current account Delta Lloyd Treasury B.V. 35,134 42,073 Bank 1, As at 31 December 36,136 42,673 Cash and cash equivalents are available on demand and interest bearing % interest per day is paid on the current accounts at Delta Lloyd Treasury B.V., a related party. This interest rate is considered to be in line with market conditions. 4.7 Shareholders equity Issued and paid-up share capital The company s authorized capital as at 31 December 2016 was EUR 907,560, comprising 2,000 ordinary shares, each of EUR nominal value. At the end of 2016, 500 ordinary shares had been issued, on which an amount of EUR per share, being 25% of the nominal value, had been paid-up. EUR (x 1.000) Issued share capital as at 1 January New shares issued - - Issued share capital as at 31 December Paid-up share capital as at 1 January Paid-up capital - - Paid-up share capital as at 31 December Other reserves EUR (x 1.000) As at 1 January 27,333 27,333 Result appropriation (623) - As at 31 December 26,710 27,333 Delta Lloyd Asset Management N.V., Amsterdam 16

19 Delta Lloyd Asset Management N.V., Amsterdam 17

20 Result for the year EUR (x 1.000) As at 1 January 31,177 15,475 Dividend paid (31,800) (15,475) To the other reserves Result for the year ,177 As at 31 December ,177 Proposed appropriation of result The Executive Board proposes to ad the result of to the other reserves. The proposal has not yet been included in the 2016 financial statements. 4.8 Amounts payable to group companies EUR (x 1.000) Distribution expenses owed to group companies Delta Lloyd Levensverzekering N.V. 24,255 21,163 Delta Lloyd Schadeverzekering N.V Delta Lloyd Life N.V ,293 21,332 Other amounts payable to group companies DLAM Holding B.V. 2,092 16,950 Cyrte Investments B.V. 6, Delta Lloyd Asset Management Vertriebs GmbH Delta Lloyd Services ,104 17,395 As at 31 December 33,397 38, Other liabilities EUR (x 1.000) Amounts owed to third-party distributors Other short-term liabilities As at 31 December 992 1,437 Delta Lloyd Asset Management N.V., Amsterdam 18

21 4.10 Contingent assets and liabilities Delta Lloyd Asset Management NV and Delta Lloyd Levensverzekering NV versus Lioncross Ltd. Delta Lloyd Asset Management NV ( DLAM ) and Delta Lloyd Levensverzekering NV ( DLL ) are involved in a Legal dispute with Lioncross Ltd ( Lioncross ). On 19 August 2015, Lioncross sued DLAM and DL, claiming payment of USD 29.1 million. According to Lioncross DLAM and DLL were in breach of contractual obligations by voting against a restructuring of Rolsa NV. DLAM and DLL believe the Lioncross claim is based on forged documents and both DLAM and DLL deny any and all liability. On 10 August 2016, the Amsterdam Court gave an interim judgement in the proceedings. The Court ruled that Lioncross has to prove that the documents which DLAM and DLL consider to be forged are validly existing. DLAM and DLL will have the opportunity to provide counter-evidence. Witness hearings are scheduled for May Off-balance sheet items Delta Asset Management N.V. also holds nine priority shares (EUR 9.10 par value each) in Delta Lloyd Deelnemingen Fonds N.V., which provides Delta Lloyd Asset Management N.V. influence in relation to the appointment, suspension and dismissal of members of the Executive Board and the Supervisory Board of the Fund. 5 Notes to the income statements 5.1 Net revenue EUR (x 1.000) Fees income from group companies 2,648 3,480 Management fees 77,568 90,655 Performance fees 1,821 24,533 Fees income from related parties 79, ,188 Fees income from external parties 2,959 2,979 Total 84, ,647 The fees from external parties comprises of the management fees received adjusted for the kickback provision. 5.2 Distribution expenses EUR (x 1.000) Distribution expenses attributable to group parties 44,275 43,246 Distribution expenses attributable to third-party distributors 1,211 1,628 Total 45,486 44,874 Delta Lloyd Asset Management N.V., Amsterdam 19

22 5.3 Other operating expenses EUR (x 1.000) Outsourced services from group companies 28,038 31,197 Management expenses 309 (23) Other (73) 1,043 Totaal 28,274 32,217 The auditor s fees are worn by Delta Lloyd N.V. and as such are shown in the financial statements of Delta Lloyd N.V. Ernst & Young Accountants LLP is appointed as the auditor of the Company. The other expenses are showing a gain due to the effect of adjustments concerning past year. 5.4 Income taxes The statutory tax rate is 25% (2015: 25%). EUR (x 1.000) Net result before tax 1,086 41,986 Tax rate 25.0% 25.0% Charge for the year based on the base tax rate ,497 Permanent differences Temporary differences Current tax ,809 A permanent and a temporary difference is included in the calculation of the tax charge for the year. A permanent difference is due to the fact that the amortization and impairment calculated on the goodwill is a non tax deductible item. As such a permanent difference is recognized. Delta Lloyd Asset Management N.V., Amsterdam 20

23 6 Other 6.1 Employees The Company did not have employees employed in 2016 (2015: 0). In its business activities the Company uses staff and facilities of the Delta Lloyd group. The fee of EUR 28,0 million charged for these services (2015: EUR 31.2 million) is included in other operating expenses. 6.2 Renumeration of the Executive Board The members of the Executive Board of the Company received no remuneration from Delta Lloyd Asset Management N.V. in 2016 and Amsterdam, 24 May 2017 Executive Board, T.J. Maters N.G.H. Ritzerveld R. van Mazijk Delta Lloyd Asset Management N.V., Amsterdam 21

24 Other information Delta Lloyd Asset Management N.V., Amsterdam 22

25 Provisions in the Articles of Association with regard to the appropriation of profit Under Article 15.1 of the Articles of Association, the result achieved for the year is at the disposal of the General Meeting of Shareholders. The company may make distributions from the profit only when its shareholders equity is greater than the paid-up and called capital plus the reserves required to be held by law. The General Meeting of Shareholders may resolve to distribute an interim dividend, subject to compliance with the above. Auditor s report The auditor s report is included on the next page. Delta Lloyd Asset Management N.V., Amsterdam 23

26 Independent auditor s report To: the general meeting of shareholders of Delta Lloyd Asset Management N.V. Report on the audit of the financial statements 2016 included in the annual report Our opinion We have audited the financial statements 2016 of Delta Lloyd Asset Management N.V., based in Amsterdam. In our opinion the accompanying financial statements give a true and fair view of the financial position of Delta Lloyd Asset Management N.V. as at 31 December 2016, and of its result for 2016 in accordance with Part 9 of Book 2 of the Dutch Civil Code. The financial statements comprise: The balance sheet as at 31 December 2016 Income statement for the year 2016 Cash flow statement for 2016 Notes to the balance sheet and income statement Basis for our opinion We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the Our responsibilities for the audit of the financial statements section of our report. We are independent of Delta Lloyd Asset Management N.V. in accordance with the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics). We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Report on other information included in the annual report In addition to the financial statements and our auditor s report thereon, the annual report contains other information that consists of: Report of Executive Board Other information pursuant to Part 9 of Book 2 of the Dutch Civil Code Based on the following procedures performed, we conclude that the other information: Is consistent with the financial statements and does not contain material misstatements Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements. By performing these procedures, we comply with the requirements of Part 9 of Delta Lloyd Asset Management N.V., Amsterdam 24

27 Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less than the scope of those performed in our audit of the financial statements. The Executive Board is responsible for the preparation of the other information, including the report of the Executive Board in accordance with Part 9 of Book 2 of the Dutch Civil Code and other information pursuant to Part 9 of Book 2 of the Dutch Civil Code. Description of responsibilities for the financial statements Responsibilities of the Executive Board for the financial statements The Executive Board is responsible for the preparation and fair presentation of the financial statements in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Executive Board is responsible for such internal control as the Executive Board determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. As part of the preparation of the financial statements, the Executive Board is responsible for assessing the company s ability to continue as a going concern. Based on the financial reporting framework mentioned, the Executive Board should prepare the financial statements using the going concern basis of accounting unless the Executive Board either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. The Executive Board should disclose events and circumstances that may cast significant doubt on the company s ability to continue as a going concern in the financial statements. Our responsibilities for the audit of the financial statements Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion. Our audit has been performed with a high, but not absolute, level of assurance, which means we may not have detected all material errors and fraud. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion. We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included e.g.,: Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company s internal control Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Executive Board Concluding on the appropriateness of the Executive Board use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company s ability to continue as a going concern. If we Delta Lloyd Asset Management N.V., Amsterdam 25

28 conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause a company to cease to continue as a going concern Evaluating the overall presentation, structure and content of the financial statements, including the disclosures Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation We communicate with the Executive Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit. Amsterdam, 24 May 2017 Ernst & Young Accountants LLP Signed by J.C.J. Preijde RA Delta Lloyd Asset Management N.V., Amsterdam 26